Costa del Sol's Property Specialists

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Ignacio Gonzalez, the Madrid Community President, has opened 2014 with an announcement that the transfer tax (ITP) levied on the purchase of used homes will go down by one point leaving the general rate at a constant 6%. In addition, the stamp duty tax has been lowered by 25% thus helping potential buyers with their taxes, mortgages and notarized documents when buying a new home.

This announcement makes the community of Madrid to have the lowest ITP in Spain, with Andalucia remaining at 10%, and Catalonia has seen an increase from 8% to 10%. The most expensive ITP rate in Spain is Extremadura at 11%.

A recent study by the famous Harvard University in the United States has been conducted to see if homes are becoming more or less accessible for the general citizen than before. The results indicate that 27% of citizens in the US spend more than half their salary on rent during 2010 compared to 19% who did so in 2000. Across the Atlantic Ocean in Spain similar trends have taken place with the average rents being reduced slightly to compensate for the economic “crisis”, but the salary of the general person has declined on a steeper curve, making homes even more unattainable then in 2000.

Nowadays, many Americans are opting to rent a home before buying a property and the rental market in the US sits are 35% in 2012 against 31% in 2004.

The European Parliament has outlined new rules on property mortgages to help increase the protection of each entity, prior to the mortgage approval. Also, the “payment in kind” has been identified in the new rules and according to Mr. Antolín Sánchez Presedo, “the proposed new rules are a major change and is the first European mortgage directive”.

Mr. Sánchez Presedo goes onto to say that the first European mortgage directive introduces a list of guarantees that “will have to be incorporated under Spanish law because they are not now”. Under this new directive, a property buyer has a mandatory cooling-off period of seven days before signing a mortgage or contract and now a further seven days to withdraw after signing.